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December 5, 2016

Foreign Buyers Spend More on U.S. Real Estate

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Foreign Buyers Spend More on U.S. Real Estate

Fewer international buyers are flocking to the U.S. to purchase real estate, but those who are, tend to spend more on their home purchases. The total sales dollar volume from international home buyers climbed 13 percent this year compared to last year – at a time when the total unit sales from international home buyers decreased, according to the National Association of REALTORS®' 2015 Profile of Home Buying Activity of International Clients.

Read more: Global Opportunities Come to the Heartland

From April 2014 through March 2015, total international sales were estimated at $104 billion, trumping last year's $92.2 billion. This represents 8 percent of the total existing-home sales dollar volume, according to NAR's report.

"In 2014, sales transaction to buyers outside of the U.S. dropped 10 percent, possibly due to the strengthening of the U.S. dollar in relation to international currencies and weakening foreign economies," says NAR Chief Economist Lawrence Yun. "However, the amount of money spent has increased; this means international purchasers in the U.S. have become an upscale group of buyers, spending more money on fewer homes."

Last year, five countries alone accounted for 51 percent of all purchases by international buyers: China, Canada, Mexico, India, and the United Kingdom.

Buyers from China exceeded all other countries in terms of their appetite for U.S. real estate, purchasing an estimated $28.6 billion worth of U.S. property, according to NAR's report. Canada buyers followed with $11.2 billion in purchases and then India at $7.9 billion; Mexico with $4.9 billion; and the United Kingdom at $3.8 billion.

International buyers tended to spend more on their home purchases than the average U.S. home buyer. International buyers spent, on average, $499,600 on their home purchases compared to the overall U.S. average home price of $255,600. Chinese buyers were found to most often spend the most, with an average price of $831,800 on their U.S. home purchases.

More REALTORS® are reporting working with international clients, up from 28 percent in 2013 to 35 percent in 2014. Four states accounted for half of all international sales: Florida, California, Texas, and Arizona, according to NAR's report.

Source: National Association of REALTORS®